Employee Restrictions: Types

Restrictive covenants are express terms in the contract of employment which restrict an employee’s activities for a limited period following the termination of employment. They are only enforceable if they protect a legitimate business interest and don’t go any further than is reasonably necessary to protect that interest.

Restrictive covenants include:

  • A restriction on working for a competitor or setting up business in competition;
  • A non-solicitation covenant preventing the former employee from poaching clients, suppliers or customers from the former employer;
  • A non-dealing covenant preventing the former employee from dealing with clients, suppliers or customers of the former employer (regardless of which party approached the other);
  • Non-solicitation of employees;
  • Restrictions on using confidential information.

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